German automakers are feeling the pressure from electric car maker Tesla. BMW, Mercedes-Benz, and Volkswagen are all racing to launch their own electric vehicles (EVs) to compete in the market. Tesla’s success in the luxury EV market has sparked a sense of urgency among these traditional car manufacturers, with Mercedes-Benz set to present an electric SUV concept at the Paris auto show. Volkswagen aims to launch more than 30 electric cars by the end of 2025, hoping to sell two to three million EVs a year. BMW, meanwhile, is revamping its “i” series of electric cars.
Despite Tesla’s recent financial struggles, it continues to be a trendsetter in the industry. Its Model S outsold Mercedes’s flagship S Class and BMW’s 7 series in Europe in 2015. Tesla’s market capitalisation is now close to that of BMW, despite the latter’s much larger size and established history. German automakers are now investing heavily in electric technology, aiming to catch up with Tesla. However, they face the challenge of maintaining their profitability while making these significant investments.
The shift towards electric cars is not just driven by Tesla’s success, but also by tighter emissions regulations. The recent scandal over Volkswagen’s diesel emissions has also increased scrutiny on traditional car manufacturers. As such, German automakers are under pressure to innovate and adapt to these changing market conditions.
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